Manufacturing activity in China rebounds: HSBC

UPSIDE SURPRISES:：The rebound suggested that growth in the sector has started to stabilize thanks to a improvement in ouput and orders, HSBC said

AFP, BEIJING

Tue, Sep 03, 2013 - Page 15

A key index of China’s manufacturing activity rebounded to 50.1 last month, its first month of expansion since April as market conditions improved, HSBC said yesterday.

The British banking giant’s purchasing managers’ index (PMI) for last month improved from an 11-month low of 47.7 in July and came after three months of contraction, HSBC said in a statement.

It was unchanged from the bank’s preliminary reading released last month.

The index tracks manufacturing activity in China’s factories and workshops and is a closely watched gauge of the health of the world’s second-largest economy. A reading below 50 indicates contraction, while anything above signals expansion.

The Chinese government’s official PMI for last month released by the National Bureau of Statistics on Sunday, came in at a 16-month high of 51.0.

Last month’s rebound suggested that growth in the sector has started to stabilize thanks to a modest improvement in new orders and output, HSBC economist Qu Hongbin (屈宏斌) said in the statement.

“This was mainly driven by the initial filtering through of recent stimulus measures and companies’ restocking activities,” he said. “We expect some upside surprises to China’s growth in the coming months.”

China’s authorities have so far been reluctant to introduce large-scale stimulus measures, but in late July did announce some steps to boost growth, such as reducing taxes on small companies and encouraging railway development. Beijing is targeting this year’s growth of 7.5 percent — the same as the objective set last year.

Meanwhile, the rate of increase in Chinese property prices picked up pace last month as some local governments eased market controls, another survey showed yesterday.

The average price of new homes in 100 major cities rose 8.61 percent year on year to 10,442 yuan (US$1,700) per square meter, according to the independent China Index Academy (CIA).

Prices rose 7.94 percent in July, according to the CIA, which is owned by Soufun Holdings (搜房), China’s largest real-estate Web site operator.

Month on month, prices were up 0.92 percent, marking the 15th straight month of growth and accelerating from July’s 0.87 percent.

The academy said the acceleration came on the back of looser policies in some cities, including Wenzhou in the eastern province of Zhejiang and Wuhu in neighboring Anhui Province, which helped release pent-up demand.

“Land prices continued to go up,” further driving up new home prices, it added.

Beijing led the rise in average new home cost among the 10 biggest Chinese cities last month, with the price surging 22.49 percent year on year and 3.22 percent month on month to 29,395 yuan per square meter, the CIA data showed.

In Shanghai, it was 28,979 yuan per square meter, up 1.07 percent from July and 7.71 percent higher from a year ago.

Property prices are a sensitive issue in China and authorities have sought for more than three years to control their rise.